What is E-Commerce Automation And How It Works For Your Business

Did you know that e-commerce sales are expected to grow to $6.3 trillion in 2024 and $7.9 trillion by 2027?

Verdict: E-commerce is growing. And the result — competing businesses, especially market leaders are keen to lean on innovation in order to stay relevant and at the top. If you’d like to be a part of these succeeding businesses, all you have to do is two things: streamline your operations and exceed your customers’ expectations.

If your goal is to achieve that and thrive in this highly competitive market, you don’t have to do anything new. The framework is already set. E-commerce is already undergoing a transformation trend through automation. All you need to do is to keep up. But what exactly is e-commerce automation, and how can it transform your business?

Understanding E-Commerce Automation

E-commerce automation refers to the use of technology to automate repetitive tasks of an e-commerce business. It works via APIs and plugins to sync with your store to automate tasks based on triggers or specific workflows.

In simple terms, as a small business, you might have the provision to manually handle tasks such as handling inventory or processing orders. However, as the business scales and order volumes go up, these tasks can become cumbersome and error-prone. This is where automation comes in — to take care of these time-consuming processes and allow merchants and respective teams to focus on more strategic aspects of the business.

Since e-commerce is a broad spectrum of activities, experts generally classify automating tasks into front-end automation (customer-front tasks such as email marketing and chatbots for customer support) and back-end automation (tasks to streamline operations such as inventory management).

Now that we’re clear on the basics, let’s move on to the other focus of this article, how does automation work for your e-commerce business?

How E-Commerce Automation Works For Your Business

A key component of e-commerce automation software is that it should integrate with your existing e-commerce platform (Shopify, WooCommerce, Magento, or any other). This is because your e-commerce store launched on a particular platform serves as the central hub for your business operations and contains data on customer orders, inventory levels, product catalogs, shipping details, and more.

If e-commerce automation has a purpose, it is to ensure that the business aligns with its goals more effectively — bring in additional revenue and keep existing revenue from getting lost. To achieve that, let’s take a look at some of the most important ways to enable automation in your e-commerce business.

Key processes that can be automated

1. Inventory Management

Issue: Running out of popular products, especially during peak seasons, can result in lost sales and missed opportunities. This can lead to a negative customer experience, lost revenue, and a permanently damaged brand reputation.

Task: Preventing stockouts

Actions:

Continuously monitor stock levels across multiple sales channels and provide a unified view of your inventory, ensuring that stock levels are always up to date in real time.
Set predefined inventory thresholds for each product. When stock levels fall below a certain point, the system triggers an automatic alert, notifying you that it’s time to restock.
Automatically place restock orders with your suppliers.
Forecast future inventory needs based on historical sales data and trends.
Provide detailed reporting and analytics on your inventory performance to easily track which products are selling the fastest, which are slow-moving, and where bottlenecks might occur.

Benefits:

This proactive approach ensures you never run out of best-selling products, allowing you to fulfill customer demand without interruptions.
For instance, items that have not sold for a long period — can be flagged, allowing you to take corrective action, such as discontinuing the product.

TLDR: Effective inventory management is crucial for e-commerce businesses to meet customer demand without overstocking or running into shortages. Automation tools can significantly streamline this process and can help you transform your e-commerce operations.

2. Order Management

Issue: Manually processing orders is a time-consuming task

Task:

Instantly generate shipping labels as soon as an order is ready for fulfillment.
Once the order is shipped, automation can intelligently route orders to the closest or most appropriate fulfillment center based on factors like customer location and shipping costs.
Eliminate manual record-keeping by beginning the fulfillment process as soon as orders are placed

Benefit: Ensures faster delivery times, reduces shipping costs, eliminates complexities, frees up time for your employees to focus on other tasks, and minimizes human error.

TLDR: Order management is an area that is best suited to be automated in e-commerce. As your business grows and orders pour in, automating order fulfillment-related tasks ensures reduced human errors and speeds up the fulfillment process.

3. Customer Support

Issue: Customers today want instant gratification and have very little patience and a low threshold for errors in the order tracking phase.

Task:

By integrating helpdesk software or using chatbots, businesses can respond to customer inquiries instantly
Automate email responses for common issues, further reducing customer wait times
Automated chatbots are programmed to handle frequently asked questions (FAQs) that customers often have, such as checking order status, delivery dates, return policies, or shipping costs. Rather than waiting for a customer service representative to respond, chatbots provide immediate answers 24/7, even outside of business hours
There will always be complex issues that require human intervention. In these cases, chatbots and helpdesk systems can be programmed to collect relevant information (such as order details or the nature of the problem) and escalate the issue to the support team, ensuring that the human agent is fully prepared to assist the customer.
Automated customer support tools can also be personalized based on customer data. For example, chatbots and automated email systems can greet customers by name, reference their order history, and offer relevant solutions based on previous interactions.

Benefit:

Especially useful for handling common questions like order status (WISMO – “Where is my order?”) or return policies.
Significantly reduces the customer service team’s workload and customer wait times, especially during high-volume periods like the holiday season.
A personalized touch makes customers feel valued and ensures that their issues are addressed more efficiently.

TLDR: Automation works across multiple channels, including website chat, email, social media, and SMS. Many businesses use omnichannel customer support strategies, and integrating automated chatbots and helpdesk software ensures that no matter where the customer reaches out from, they receive a consistent and immediate response.

4. Marketing Automation

Issue: On average, nearly 70% of online shopping carts are abandoned before a purchase is completed.

Task:

Automated marketing tools can detect when a customer leaves the site without completing their purchase and trigger a series of follow-up emails to encourage them to return and complete their transaction.
Personalization is key to successful marketing. By analyzing customer behavior, such as browsing history, past purchases, and interactions with your site, these platforms can generate automated emails that suggest products tailored to the individual’s preferences. For instance, if a customer frequently purchases skincare products, the system can automatically send personalized recommendations for complementary products, such as moisturizers or serums
Send triggered email sequences based on specific customer actions or milestones. These actions might include signing up for a newsletter, making a first purchase, or leaving a review.

Benefits:

This increases the likelihood of repeat purchases by enhancing the customer experience by providing value through relevant product suggestions.
Engage customers at every stage of their journey, providing timely and relevant communication that keeps them connected to your brand
Fosters emotional connections with your brand, leading to long-term loyalty

TLDR: Automated marketing campaigns are essential for e-commerce businesses looking to nurture customer relationships, increase engagement, and drive sales by setting up highly targeted, data-driven campaigns that are triggered by specific customer actions or behaviors.

5. Post-Purchase Experience

Issue: The post-purchase experience is a critical, yet often overlooked, phase in the customer journey.

Task:

One of the biggest concerns for customers after making a purchase is knowing when their order will arrive. Automated delivery notifications can keep customers informed every step of the way. From the moment the order is shipped to when it’s out for delivery and finally delivered, automated tools can send timely updates via email, SMS, or even in-app notifications.
By monitoring shipment statuses and tracking potential issues like late deliveries, automation tools can trigger proactive responses to affected customers. For example, if a customer’s order is delayed, the system can automatically send an apology email along with an updated delivery estimate, a discount for future purchases, or free shipping on the next order as a goodwill gesture.
When a customer decides to return an item, the system can generate a return label automatically and send it to the customer via email or set up a portal to provide step-by-step instructions on how to return the product. Automation tools can also track the returned item with real-time updates on their refund status.

Benefit:

Reduce customer anxiety and minimize the volume of WISMO (Where Is My Order) inquiries, common during the post-purchase phase to make sure that customers no longer need to reach out to ask for updates.
Resolve delivery issues such as late deliveries and lost and damaged packages before they escalate into customer complaints.
Make the returns processes can be made effortless, transparent, and customer-friendly.

TLDR: While most businesses unwittingly miss out on their efforts, providing exceptional post-purchase experiences can help build long-term loyalty, encourage repeat business, and improve customer satisfaction. Automation plays a vital role in enhancing the post-purchase experience by ensuring that every aspect—delivery notifications, customer feedback collection, and returns — is handled efficiently and seamlessly.

Benefits of E-Commerce Automation for Your Business

Increased Efficiency and Productivity – By automating repetitive tasks, businesses can free up valuable time that can be spent on more strategic areas like product development or marketing. Automation reduces the need for manual intervention, allowing employees to focus on growth initiatives.

Cost Savings – Automation reduces the need for large teams handling manual tasks like order management, inventory tracking, or customer support. This translates into significant cost savings in labor and resources, allowing businesses to scale without proportionally increasing operational costs.

Improved Customer Experience – Via proactive order status updates and issue resolution, automation helps businesses deliver a better CX, particularly in the post-purchase phase. Automation also ensures faster response times and personalized customer support experiences.

Scalability – As your business grows, manual processes can become bottlenecks. Automation ensures that your e-commerce operations can scale seamlessly to handle more orders, customers, and queries without needing additional resources.
Error Reduction – Human errors, such as incorrect order fulfillment or missed inventory restocks, can cost businesses both time and money. Automation minimizes the chances of these mistakes, leading to more accurate operations and happier customers.

Time To Automate Your E-Commerce Business’ Processes

As sales increase and operations scale, e-commerce businesses must keep up with the pace of change.

Maintaining high customer satisfaction can sometimes seem nearly impossible. However, by implementing well-designed automation strategies, merchants can reduce the burden of manual processes while prioritizing the customer experience.

Automation can consolidate sales channels, manage inventory across those channels, and coordinate shipping. Automation is the key to connecting your business to customers where they already spend their time, in a way that provides them a seamless experience, so that they will return again and again.

What is E-Commerce Automation And How It Works For Your Business9 min read

Understanding E-Commerce Automation